newspapers and magazines: bigger problems than the Great Depression

U.S. print newspaper and magazine advertising revenue is falling sharply.  In the first quarter of 2009, newspaper print advertising revenue declined 30% compared to the first quarter of 2008 ( $5.92 billion in 2009 Q1; $8.42 billion in 2008 Q1).  Magazine rate-card-reported advertising revenue, which does not take into account discounting likely to be more significant in more difficult economic times, declined 20% ($4.18 billion in 2009 Q1;  $5.25 billion in 2008 Q1).  These declines are associated with the current, major macro-economic contraction.  However, these sharp declines in newspaper and magazine advertising are not just a macro-economic effect.  They also indicate deep structural changes in the communications industry.

The current newspaper and magazine advertising revenue contraction is much more rapid and significant than that associated with the Great Depression.  From 1929 to 1931, newspaper and periodical advertising revenue fell only 23% and 25%, respectively.  The revenue decline subsequently accelerated and amounted to 31% and 42% for newspapers and periodicals, respectively, from 1931 to 1933.  Because periodicals have a higher share of subscriber revenue than newspapers, the more rapid decline in periodical advertising was offset to an extent by periodicals’ greater revenue diversification.  The opposite comparative business model effect operates with the current more rapid decline in newspaper advertising revenue and newspapers’ greater dependence on advertising.

Print media almost surely will remain a significant feature of the public landscape. Now, however, every person can operate an astonishing, virtual multi-media printing press that the Internet provides globally.  How persons use print media undoubtedly will change enormously, and so too will the traditional business of newspapers and magazines.

Note:  Here’s U.S. Census data concerning the revenue structure of U.S. newspapers and periodicals from 1880 to 2007. Available also as an Excel file.

Update: Now includes data through 2008 from the 2008 Services Annual Survey, Tables 3.1.1 and 3.1.2.

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